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Economic Impacts of the Mississippi Seafood Industry

28 July 2014

Rapid changes in the economic structure of the Mississippi commercial fishing and seafood-related industry were observed during the last decade. Local spending by both the harvesting and processing sectors declined due to changing internal and external environments affecting the industry.

Support infrastructure and available fishery resources had diminished due to natural, technological, and manmade disasters. Sustained seafood processing requires inflow of raw seafood products from outside sources. With the globalization of the seafood industry, distribution and consumption of seafood products are no longer constrained by local production. Imports from other countries or states enable local processors and dealers to process and sell seafood products to their customers on a regular basis. The global nature of the industry created commodity flows that virtually link the various processes of production, processing, distribution, storage, and consumption of seafood products.

The earliest estimates of the economic impacts of the Mississippi seafood industry were prepared by the author of this bulletin for the Performance Evaluation and Expenditure Review Committee of the Mississippi Legislature in 1991 (MSU-CREC 1991). The direct, indirect, and induced output effects of the seafood industry in 1989 totaled $489 million. To produce these outputs of  economic goods, a broad range of supporting infrastructure provided forward and backward linkages from inside and outside of Mississippi. Among other facilities, this support infrastructure included fishing docks, ice plants, fuel docks, commercial processing plants, the commercial fishing fleet, marine electronics dealers, marine supply businesses, net and gear manufacturers and repair shops, and boat and motor manufacturers and repair shops. Subsequent estimates of the economic impact of the state’s seafood industry by major species and economic sectors were prepared in 1991, 1994, and 1997 for the Mississippi Department of Marine Resources (Posadas 2000) and for the oyster and shrimp harvesting and processing sectors in 2007 (Posadas 2009a, 2009b).

The National Oceanic and Atmospheric Administration (NOAA) Fisheries Economic Model estimates four types of economic impacts: employment, income, total value added, and output or sales (Kirkley 2009). The economic impacts of the seafood industry in Mississippi and the 22 other coastal states in the U.S. were estimated starting in 2006 up to the present (NOAA Fisheries 2013a). The economic impacts were estimated by sector, including harvesting, processing, importing, wholesaling, and retailing. However, economic impact estimates for Mississippi, were not broken down by major seafood species. The annual sales and employment impacts of the entire Mississippi seafood industry since 2006 are shown in Figures 1 and 2. The wide fluctuations in the economic impact estimates indicate that the state seafood industry was very vulnerable to natural and technological disasters that occurred in August 2005 and April 2010.

The Mississippi Department of Marine Resources (MDMR) and other state regulatory agencies need updated estimates of the economic impacts of the state seafood industry. This need became very urgent after the massive damages from the natural and technological disasters that hit the seafood industry (Posadas 2007, 2008, 2010a, 2010b; Posadas and Posadas 2011, 2013a, 2013b; Posadas et al. 2011). MDMR expressed a more vital need for additional information on the economic impacts of the seafood industry by economic sector and by major species landed, processed, distributed, and consumed in Mississippi.

This study measured the economic impacts of the Mississippi seafood industry by major species and by economic sector. Specifically, it aims to estimate the economic impact of seafood harvesting, processing,wholesaling, restaurant, and retailing sectors in Mississippi by major species, primarily shrimp, oyster, crab, and finfish.

ECONOMIC IMPACTS BY MAJOR SPECIES

Economic Impact Indicators

The 2009 statewide results of the NOAA Fisheries Economic model for the state of Mississippi were used in estimating the 2009 economic impacts of the state seafood industry by economic sector and major species. These results included the four types of economic impacts: output or sales, employment, income, and value-added. The estimates of the indirect tax impacts of the Mississippi seafood industry were not reported in the 2009 statewide results of the NOAA model.

Seafood Production Sectors

The 2009 total economic impacts of the Mississippi commercial harvesting and seafood processing sectors were broken down by major species using 2009 exvessel, dock or landing values, and processing-plant gate or wholesale values. The 2009 Mississippi commercial harvesting impacts were split according to the 2009 total state commercial landing values of each of the four major species. The 2009 Mississippi seafood processing sector impacts were also divided according to the 2009 state total plant-gate values of the processed products for each of the four major species.

Seafood Importing Sector

The Mississippi seafood importing sector was not included in the itemization into the four major species due to the lack of needed economic information about that sector. The FE model estimated that the 2009 Mississippi seafood-importing sector produced a total economic impact of $13.65 million and provided a total of 50 jobs. The Mississippi seafood-importing sector generated a total income impact of $2.19 million and value-added impact of $4.16 million.

Seafood Distribution Sectors

The 2009 economic impacts of the seafood-wholesaling sector and fish markets were separated  according to the expenditure shares of each of the four major species reported by these sectors in a survey of January–December 2011 transactions of Mississippi seafood wholesalers and retailers conducted by the author in 2012–2013. The 2011 wholesale and retail sales values were the only values available for wholesaler and retailer seafood transactions broken down by major species in Mississippi. The 2009 seafood restaurant impacts were divided according to the expenditure shares of each of the four major species reported by these establishments in a 2010–2011 survey of Mississippi seafood restaurants for transactions from January to December 2009 (Posadas et al. 2012).

Indirect Tax Revenue Impacts

The author created an IMPLAN model to estimate the 2009 indirect tax revenue impacts of the Mississippi seafood industry by major species and economic sector. In order to capture structural changes in the state economy, Mississippi data from 2009 were used. The tax revenue impacts of the four major species were estimated by using the IMPLAN Professional 3.0 software. The use of the impact-planning software and 2009 data allowed the estimation of tax revenue impacts with the most updated state multipliers.

Total Economic Impact of the Seafood Industry

The total 2009 economic impacts of the entire Mississippi seafood industry by economic sector without imports are shown in Table 6. The commercial harvesting sector contributed $60.86 million, which was 22.1 percent of total sales. The seafood-processing sector added sales of $78.91 million—28.6 percent of the total. The seafood-wholesaling sector produced sales of $10.45 million—3.8 percent of the total. Fish markets generated $18.10 million in sales—6.6 percent of the total. Seafood restaurants added $107.28 million—38.9 percent of the total.

Economic Impacts of the Shrimp Industry

The total 2009 economic impacts of the Mississippi commercial shrimp industry by economic sector without imports are shown in Table 7. The output of economic goods directly produced by this industry generated a total economic impact of $141.77 million. This economic output created 3,091 jobs and generated total income of $57.44 million. Commercial shrimp industry contributions to the indirect business tax collections reached $6.73 million in 2009.

Economic Impacts of the Oyster Industry

The total 2009 economic impacts of the Mississippi commercial oyster industry by economic sector without imports are shown in Table 8. The total output of economic goods directly produced by the this industry generated a total economic impact of $23.72 million. This economic output created 562 jobs and generated annual income amounting to $9 million. The commercial oyster industry contributed about $1.15 million to indirect business tax collections.

Economic Impacts of the Crab Industry

The total 2009 economic impacts of the Mississippi commercial crab industry by economic sector without imports are shown in Table 9. The output directly produced by this industry generated a total economic impact of $8.18 million. This economic output created 244 jobs and generated total income of $3.55 million. This industry contributed about $0.52 million to indirect business tax collections in 2009.

Economic Impacts of the Finfish Industry

The total 2009 economic impacts of the Mississippi commercial finfish industry by economic sector without imports are shown in Table 10. The output of economic goods directly produced by this industry generated a total economic impact of $101.91 million. This economic output created 2,445 jobs and generated total income of $57.44 million. The commercial finfish industry contributions to the indirect business tax collections reached $4.68 million in 2009.

SUMMARY AND RESEARCH IMPLICATIONS

The Mississippi marine regulatory agencies needed updated estimates of the economic impacts of the state seafood industry in order to effectively manage state marine resources. The need for economic information became more pressing due to the massive damage arising from recent natural and technological disasters that affected the industry. A more vital need was expressed by the state regulatory agencies for additional information on the economic impacts of the seafood industry by economic sector and by major species landed, processed, distributed, and consumed in Mississippi. This study estimated the economic impacts of the seafood harvesting, processing, wholesaling, restaurant, and retailing sectors in the state by major species, primarily shrimp, oyster, crab, and finfish.

The Mississippi seafood industry in 2009 generated total economic impacts of $275.59 million and provided 6,342 jobs in harvesting, processing, wholesaling, fish markets, and restaurants. The commercial harvesting sector contributed $60.86 million, or 22.1 percent of the total sales impacts. The seafood-processing sector added $78.91 million, or 28.6 percent of the total economic impacts. The seafood-wholesaling sector produced additional sales of $10.45 million, or 3.8 percent of the entire industry. Fish markets generated a total of $18.10 million in economic impacts, which was 6.6 percent of the entire industry. Seafood restaurants added $107.28 million, or 38.9 percent of the industry’s impact.

The Mississippi commercial shrimp industry in 2009 generated a total economic impact of $141.77 million. This economic output created 3,091 jobs and generated total income of $57.44 million. The commercial shrimp industry contributions to the indirect business tax collections reached $6.73 million.

The total output of economic goods directly produced by the Mississippi commercial oyster industry generated total economic impact of $23.72 million. This economic output created 562 jobs and generated annual income of $9 million. The commercial oyster industry contributed about $1.15 million to indirect business tax collections.

The output directly produced by the Mississippi commercial crab industry in 2009 generated a total economic impact of $8.18 million. This economic output created 244 jobs and generated total income of $3.55 million. This industry contributed about $0.52 million to indirect business tax collections.

The output of economic goods directly produced by the Mississippi commercial finfish industry in 2009 generated a total economic impact of $101.91 million. This economic output created 2,445 jobs and generated total income of  $57.44 million. The commercial finfish industry contributions to the indirect business tax collections reached $4.68 million in 2009.

This bulletin will be updated to include detailed estimates of the 2011 economic impacts of the Mississippi seafood industry by economic sector and by major seafood species. The total economic impacts of the harvesting and processing sectors in 2011 will be broken down by major species using the 2011 landings and plant-gate values. The 2011 harvesting impacts will be categorized according to the 2011 total landing values of each of the four major species. The 2011 processing sector impacts will be divided according to the 2011 total plant-gate values of the processed products for each of the four major species.

The 2011 economic impacts of the seafood- wholesaling sector and fish markets will be separated according to the same expenditure shares of each of the four major species reported by these sectors in a 2011 survey of Mississippi seafood wholesalers and retailers. The seafood restaurant impacts will be divided according to the same expenditure shares of each of the four major species reported by these establishments in a 2009 survey of Mississippi seafood restaurants.

This bulletin presents the most recent NOAA Fisheries economic information on the economic impacts of the entire Mississippi seafood industry from 2006 to 2011. The itemization of the economic impacts of the Mississippi seafood industry in 2009 by  economic sector and major species was made possible by the results of the collaborative research efforts during the past 5 years between the Mississippi Department of Marine Resources and the author. The mail and online surveys of the full-service and limited-service restaurants in 2010–2011 and the seafood wholesalers and retailers in 2012–2013 collected the basic economic information needed in the detailed economic impact analysis of the Mississippi seafood industry. Economic impact estimation beyond the year 2011 will require updated establishment surveys of the breakdown of wholesale, retail, and restaurant sales transactions of seafood products in the state.

July 2014

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